Why College May Be Totally Free Within 10 Years

Higher education is in transition and with a coming proliferation in online courses could be totally free for many within a decade. The status quo won't yield easily. But this is looking like a real answer to runaway student debt.

NANTUCKET, Massachusetts — As few as 10 years from now, quality higher education will be largely free—unless, of course, nothing much has changed. It all depends on whom you believe. But one thing is clear: The debate about financing education grows louder by the day.

Experts with a wide range of views on the subject, including the always-interesting Harvard professor and former Treasury Secretary Lawrence Summers, weighed in last weekend at the Nantucket Project, a big-think conference in the spirit of TED and Aspen Ideas Festival. The most provocative, though, were hedge fund billionaire Peter Thiel and the author and entrepreneur Vivek Wadhwa.

Thiel has gotten a lot of attention for his view that higher education is broken, and that many kids would be better off saving their money and going straight from high school into a trade or developing a business. His “20 under 20” fellowship grants high school graduates with a sound business idea $100,000 if they agree to skip college and go right to work on their idea.

Wadhwa’s views are less well known, even though he served as a counter-point interview last May on a 60 Minutessegment featuring Thiel. Wadhwa has unwavering faith in the power of technology to fix much of what is wrong with the world, and he believes that online courses will revolutionize higher education and cut the cost to near zero for most students over the next decade.

This is a powerful concept. On the same weekend some 1,500 miles away in Kansas City, the Council for Economic Education was hosting its own conference of ideas and started by noting that student debt now tops $1 trillion and that a third of college students drop out–with debt and without a degree. Nearly a third of the average 18-to-24-year-old’s income goes toward debt repayment, much of it owing to student loans.

The Council, along with other financial literacy advocates, want to attack this scourge by educating students in the classroom about how to manage their money. At the conference, officials unveiled a new set of voluntary national content standards for teaching personal finance in grades K-12.

Yet if Wadhwa is right the student debt problem will take care of itself—at least as it relates to the next generation and those that follow. Online courses will proliferate to such a degree that acquiring knowledge will become totally free. There will still be a cost associated with getting a formal degree. But most universities, he says, “will be in the accreditation business.” They will monitor and sanction coursework; teachers will become mentors and guides, not deliver lectures and administer tests. This model has the potential to dramatically cut the cost of an education and virtually eliminate the need to borrow for one, he says.

This isn’t an argument that Thiel was ready to entertain. His focus is on skipping college altogether unless you can get into a top-tier school and are certain to enter a highly paid field. He believes we are experiencing a “psycho-social” bubble in higher education. Everyone believes they have to have a college degree and so they will borrow and pay any amount to get one from any school.

Most families view a college degree as insurance; something they can buy to guarantee that they do not fall through society’s cracks, Thiel says. But what they are really buying is “a dunce hat in disguise” because employers have less respect than ever for a degree that comes from a second-tier university. Such a degree, in Thiel’s view, brands a graduate as mediocre.

Summers, a former president of Harvard, agrees that higher education is in transition. But he thinks Thiel is “badly wrong” about his bubble theory and that Wadhwa is severely underestimating the value of the total university experience. The gap between what college graduates and high school graduates earn is only widening, which speaks to the continuing value of a college degree—no matter what it costs. And, says Summers, “If you think higher education is expensive, try ignorance.”

There is a reason that people pay a lot of money to go to an event like the Super Bowl when it is free on TV, Summers offers. They get more out of it by being present. Something similar is true of an on-campus education, where you may attend extra-curricular events and engage more fully with faculty and other students.

For his part, Wadhwa allows that there will always be students able and willing to pay for a traditional college experience and for them it will be a worthwhile investment. But for the vast majority, from a financial standpoint that kind of education makes no sense and is fast becoming unnecessary. He believes the higher education revolution is coming soon and will happen fast—perhaps fast enough to keep the next generation from finishing school with debts they may never be able to pay.

Dan Kadlec is a journalist who has written about personal finance for TIME and other outlets for 25 years. He is the author of three books, a leading voice in the global financial literacy movement, and strategic adviser to the National Financial Educators Council.

Kadlec's latest is A New Purpose: Redefining Money, Family, Work,Retirement, and Success

The accrediting agencies need to be forced to offer accreditation to free online classes for college credit when the courses meet the same criteria the classroom courses do. The brick and mortar universities cannot be allowed to have a monopoly on the college degree. A free or very low cost education was a major cause of this countries rise to greatness and the lack of such has already degraded our society. Look at the costs of medical school and how negatively that is affecting us. Low cost education would be the best economic stimulus I can think of.

When the founders described this nation as "the land of the free", I don't think free healthcare, contraception, or college degree's are what they were referring to. *Someone* will pay all this free stuff, until that someone collapses...or gets wise.

Ask Greece how "free everything" is working out. Or just wait and ask your neighbor in 1-4 years...if you can find him in the rioting mob.

If college is "totally free," who is going to pay those "mentors and guides?" Since online education will require far fewer instructors for more students, what will happen to the thousands of people currently training as university faculty? We can certainly expect that if the market were to be flooded with "free" college degrees, most liberal arts degrees would be even more sharply devalued in economic terms than they are at present.

Accreditation seems missing in these discussion. The American Chemical Society grants accreditation based upon the schools ciriculum and schools not accredited are (usually) those who teach little or no Physical Chemistry. The Chemical Industry makes hiring and compensation decision using accreditation as criteria. There are jobs for non-accredited Chemists but they pay less, somewhat better than Technicians but less than an ACS accredited Chemist. Part of the accreditation process is time in labs. Obviously grades reflect on how well an applicant understands his Major. In my opinion, these criteria are more important than which school you go to for the hiring process.

I just cannot believe you have had relevant experience in grad schools and science degrees. Measures of cost include leisure (NONE) and health ( I weighed less than 130 lbs then), fun (ZERO). I was not unique, but I had a Teaching Assistantship that exempted tuition and paid $90/mo in the 1950s before Soc Sec and IRS taxes deducted.

I got by but it was not lost on me that while the University lost money on my tuition and the $90/mo., I was doing a Professor's job that they did not have to hire. In short I was profitable.

It's hard to get somethings to change, look at oil and fossil fueled cars. However, classes such as math, english, history and so on could easily be done online. Those are topics that don't change, the only reason for a teacher is to have someone to help you or answer some questions. It would cut costs for a lot of courses that could be done like that. But will it happen? I think its too much of a wish and hope. Big banks want people to take out loans and pay them with interest, they will fight this and no internet startup will be strong enough to fight it alone.

Almost any kind of knowledge you need, technical or otherwise, is now accessible online. The only things that prevent an immediate meltdown of the college paradigm are credentialism and college athletics. By creating a halo effect around the exalted "degree", students are told (and fool themselves into believing) that they have the "proper" credentials for pursuing their chosen path. As noted, this credentialing is falling apart rapidly. The university campus social milieu involving athletics, especially football, is irresistible to high school graduates. Fans and alumni are addicted to it. That is probably the strongest thread holding the rotten system together. And as we know, college football at the big schools has been totally corrupted by money and academic scandal. And yet, the beast stumbles ahead, devouring the innocence of naive and gullible youth. Everyone has a great time...until the bills come due.

I went to Johns Hopkins, BA, MA, PhD. The tuition was about $1600. It is now on the order of $50,000. I could not afford to send any of my children there, not that I would want to. The universities exist solely for the faculty. When I went teaching, except for a few exceptions, bit the hairy wazoo, to use a phrase that I learned from my fellows.

Textbooks need to be free, colleges and universities need to be free, and faculty should wake up to reality.

I don't think the personal value of a campus-based education has eroded or is the problem. My son is at University now and I'm amazed by how the experience is transitioning him to the next phase of his personality and his life, just like it did for me. None of that has anything to do with his curriculum.

However, the economics – cost-benefit – of the traditional campus-based experienced is broken. The spiraling cost is what has broken the cost-benefit balance, not the value of the education. The seriousness of the problem varies by discipline, but it is a problem across the board.

Content should be free on-line and you pay for testing and certification. Testing to be done at centers spread all over, and the centers can test for whatever any college is offering because the tests are on-line. Biometric ID to avoid cheating.

A community college here prepares a student to be a chemical lab technician in two years and a large local chemical company makes finding a job easy. A very inexpensive education for a well paying job. My wife taught them and I hired them and it has been gratifying to see many complete their four year degree at night in a nearby college. I also hired a PhD or two, at least one gave the impression his degree was the hardest work he did or intended to do.

Because of exploding student debt the higher education system is the worst of the lot.

We live in a world of computers which is continuously exploding.

It is clearly inefficient to allocate huge physical resources to a problem that can be solved way more efficiently through the use of the communication capabilities that the Internet has made available to us.

Our tendency to hang on to ways of life and institutions beyond their useful life span has left us with an outmoded, over priced and failing under the weight of it's own inefficiencies educational system.

Doesn't matter though, it is already way past the tipping point and it's going down.

Out with the old campus and in with the computer. - - Long live the computer!

No, sorry, free higher education won't happen. There may be free courses or way in which people can acquire technical knowledge at no cost. But the value of a college diploma has nothing to do with the knowledge that supposedly goes with it. The value has entirely to do with its credentials. A degree from Harvard will always blow away a degree from Your State U., ok? And it's stupid to think otherwise.

So go ahead, lower classes. Load up on free courses and gain the knowledge therein. You will find, however, when you compete in the job market, that your knowledge is useless. No credentials? No job. Oops... the best you will do is a job at Starbucks.

I got my Bachelor's in the traditional way, but got my Master's degree in Electrical Engineering via remote closed circuit classes available at my site of employment. This bears virtually no difference from taking classes online and it worked fine.

Traditional colleges and universities are definitely pricing themselves into irrelevancy.

Free or worth nothing????......if the Obama college student supporter interviews are any indication.....universities are currently just warehousing 18 year olds for 4 or 5 years. I have never seen such uneducated, stupid ill informed dolts!

It use to be the responsibility of the individual for healthcare, employment, education, housing, food and retirement. We are finally evolving so that people have time to do nothing productive. We will now have the artist and poets that will advance our society.

It use to be the responsibility of the individual for healthcare, employment, education, housing, food and retirement. We are finally evolving so that people have time to do nothing productive. We will now have the artist and poets that will advice our society.

What both viewpoints miss is that college is not only about attaining knowledge, as if one were just populating a database with a bunch of facts (whether they be about art history or fluid dynamics).

When reviewing resumes, I place a higher value on applicants who have 4-year college degrees from live-on-campus schools. Why? Because college is REALLY about learning how to function in the world. It's about learning how to live on your own without a parent reminding you about the project due in 2 weeks. It's about being exposed to ideas that are completely non-nonsensical until you learn there are hidden variables in every equation. It's about building team skills on a project that includes 2 slackers that you can't get to carry their fair share. It's about trying to figure out how to cajole an *sshole professor's ego so he'll take your contrarian psychology theory seriously.

College is effectively 10 years of life experience squeezed into 4, with a bunch of extra knowledge shoved in your head at the same time.

It's also a big character reflection to see whether someone actually finishes their degree as well. In fact, it's the completion of the degree that I value most when looking at resumes. Working through difficulty, completing something momentous - that's a real reflection on whether they will be someone we can depend on.

While I recognize the role that trade schools and community colleges have to play in our country's future, I still contend that earning a 4 year degree is a rite of passage that transcends the knowledge gained - it makes the person who gets hired.

An important corollary to the above is that some people gain the same fullness of character in the real world, through the good ol' school of hard knocks. People who return to school after many years in industry are able to fill in the knowledge aspect of a degree at a community college or with online coursework. But those who simply go to a regional community college or try to earn an online degree right out of high school simply don't get the same experience and qualifications that those who go to a live-on-campus college or university.

@JimH69 A quality online degree could be offered much much less expensively than is currently available. It would not necessarily be free. They could charge a tenth of what people are paying now and still make a profit. Or will the rich powerful universities legally stifle free competition.

Your ignorance isn't free. The working, intelligent, and informed citizens of our nation pay in more than just dollars for your complete disregard of knowledge and common-sense. We should ship your @sses to China since you are a primary reason as to why there aren't any jobs available. They're taken by idi0ts.

Here's some of your logic right back at you: since your a woman, I'll assume you don't work and you let your significant other do all the work. That's socialism and your getting a free ride. Child rearing isn't a job. Tell your kid to get a job and pay his own way.

Most Republicans drop out by the time they're a freshman and the remainder are paper graduates since they can't apply basic concepts to real life. It's those people that are breaking the back of public education...children of conservatives that get an education on the taxpayer dime and then can't use any of it by the time they're an adult. Liberals understand the importance of a good education and we don't want to waste the taxes we pay into the system.

If I'm a CEO or project manager, why would I hire Americans when I can reap a significantly greater profit by investing in automated robotics or citizens of a developing nation. Those who manage businesses no longer see the use in humans...pretty soon our only remaining use will be to interact with other humans within the customer service department. The ironic part is that no one will be able to afford the products the company produces since no one is employed.

@tommeixner because of the name. Europeans and Asians look at the American schools as the best of the best. So when you graduate from harvard or mit or princeton or rutgers or whatever the school might be, it looks good. its like buying an iphone for 500 dollars when a cheaper android does the same job. but you wont have an iphone youll have an android

People say on the one hand that robots can do everything human beings can do, and then say on the other hand that everyone needs to be "employed."

Why is it that everyone needs to be employed at jobs that they hate that robots can do -- if robots can do them? Robots exist to do work for humans.

Let the robots do tedious, miserable, mind-numbing drudgery. Let human beings do art, philosophy, music, meditation, travel, writing, singing, quiet contemplation of the human experience, science ... and the countless other things that only human beings can do or are meant to do.

Of course I'm not saying that robots can currently do all the horrible things that human beings are now forced to do. However, most jobs are unfathomably, disgustingly horrible -- the idea that humans should have to debase their dignity in this manner forever into the future because that's how it's always been is useless.

@gekkobear HAHAHAHA that was rich! Did you read the whole thing? Only 3% of voters had no high school degrees. High school graduates made up 21% of all voters, and 55% of the were democrats. Those with some college or college degrees made up 58% of the electorate and their party affiliation was split roughly 50-50. The remaining 18% of those polled with postgraduate degrees were 58% Democrat! So Democrats are generally better educated than Republicans, evidenced in the very data you cited! You learned how to spit spin from the worst!